The motley collection of buses, limos, and cars that rolled out of Berlin this morning under a gray sky all had one thing in common: Nothing but steam coming out of their tailpipes.

From a BMW luxury sedan to Toyota sport utility vehicles, the cars that pulled out of a fueling station in downtown Berlin were all powered from the fuel found in the brand-new pumps alongside the diesel and gasoline. The vehicles were tanked up on hydrogen, a zero-emissions fuel source that’s struggling to get off the ground in Europe and the United States.

The rally ran 180 miles (290 kilometers) from Berlin to Hamburg, Germany’s second-largest city. Organized by a coalition of auto and energy companies, the idea was to convince the German public that hydrogen will be a viable, green fuel source for cars, buses, and trucks.

It’s all part of an ambitious effort to build support for a network of hydrogen fueling stations across Germany. Called the Clean Energy Partnership, the group hopes to have more than 1,000 fueling stations in operation by 2020. Since it began in 2002, the CEP has grown to include 13 companies, including automakers BMW, Daimler, Ford, GM, Volkswagen, Toyota, the Berlin and Hamburg public transport systems, Shell, Statoil, TOTAL, and a variety of German and Norwegian engineering companies involved in building fueling stations. (Disclosure: This story was produced as part of The Great Energy Challenge initiative by National Geographic in partnership with Shell. National Geographic maintains editorial autonomy.)

Of chickens and eggs

The Clean Energy Partnership is also being supported by the German government, which plans to invest 740 million euros ($940 million) in hydrogen and electric cars over the next decade.

Starting with hydrogen fueling stations in Germany’s biggest cities—first Berlin, and now the port city of Hamburg—the coalition hopes to overcome a problem that has plagued hydrogen advocates for years. Before energy companies invest in special hydrogen fueling stations, which can each cost millions of dollars to design and build, they need to know there will be customers for the technology. At the same time, customers are unlikely to buy cars if they are unsure there will be a way to fill them up.

“This chicken-and-egg problem is one of our main problems,” says Daimler spokesman Matthias Brock. Right now, there are about 30 hydrogen stations in Germany, making the country the European leader in hydrogen technology. (Only a handful of the fueling stations are open to the public; the rest are experimental or belong to industrial users.) In the next five years, energy companies including Shell, TOTAL and Statoil have all signed on to build more stations to provide an infrastructure for drivers. Says Brock: “The goal is to have a network of 1,000 stations, but every new filling station is good news.”

If car companies see a nationwide network taking shape by 2015, they say they’ll be able to roll out cars based on fuel-cell technology that uses hydrogen to create electricity. Daimler already has a model—the Mercedes Benz B-Class F-CELL, and three of them took part in the rally between Berlin and Hamburg. Toyota, GM, Ford and Volkswagen all had fuel cell cars in the rally; BMW is experimenting with cars that burn hydrogen directly in the car’s engine

Whether hydrogen is burned in car engines or used to generate electricity in fuel cells, its biggest selling point is as a way to store energy. In a process called electrolysis, water molecules are split into their component parts, oxygen and hydrogen, which can then be stored in tanks until it’s time to fill up a fuel-cell car.

Advocates say it could be a way to make use of the electricity being generated by Germany’s abundant, but unpredictable renewable energy sources. “Wind blows when it wants, not when we need it,” BMW traffic and environment manager Hans-Christian Wagner says. “Hydrogen is a means to store energy.”

Hydrogen also solves a problem that plagues electric vehicles. “The main advantage of hydrogen, especially [when used in] fuel cells, is much higher range and shorter refueling time—three minutes versus five to eight hours” for electric cars, says Daimler’s Brock. “We believe it’s the best option for emission-free driving in the future.” It’s especially good for larger vehicles, such as buses, that are too heavy for the kind of batteries that are needed to power electric vehicles. (In fact, Hamburg has had 10 fuel-cell buses moving commuters around the city since 2003.)

In a perfect world, windmills would generate electricity during off-peak hours—in the middle of the night, for example—to produce hydrogen, which could be stored and used to fill up vehicles for people’s morning commutes.

Coal-fired hydrogen?

But some experts are skeptical of hydrogen, which today is produced either by breaking down natural gas or using large amounts of electricity. And the reality is that though advocates talk about how renewable energy could be employed, most of Germany’s electricity today is being generated by coal-fired power plants. For now, that makes hydrogen the equivalent of a fossil fuel. And so far, fuel-cell engines are an inefficient use of electricity. It takes more energy to generate hydrogen than the hydrogen delivers in power to the car.

Joseph Romm, senior fellow at the Center for American Progress, helped oversee fuel-cell research for the U.S. Department of Energy during the Clinton administration, but he sees all-electric vehicles as a better bet. “I’m skeptical—I don’t see how the chicken and egg problem can be solved," says Romm, who has visited the subject frequently on his widely read Climate Progress blog, and who addresses hydrogen as another technology “breakthrough technology illusion” in his new book, Straight Up. “No one’s going to be building these stations until they’re sure they’re going to get their money back,” he says. “Unless a lot of car companies come in, you’re talking about taking a huge gamble just because a couple of companies are going to bring out a model or two.” Patrick Schnell, head of innovation and sustainable development at French energy giant TOTAL, says Germany is a test case to see if cooperation among the energy companies—with no one company bearing the majority of the risk—can get a network of filling stations in place without breaking the bank. “We need to find a way to build hydrogen infrastructure with partners, not alone,” Schnell says.